Spotlight on economy: Consumer inflation under wraps

Inflation in the U.S. appears quite contained by all official measures, and the latest report on consumer prices is unlikely to alter the broader picture.

The consumer price index is projected to rise 0.1% in August, according to economists polled by MarketWatch. A 0.1% increase is also expected in the core rate, which excludes volatile food and energy costs.

The report will be released by the Labor Department at 8:30 a.m. Eastern.

Over the past 12 months, consumer inflation has risen at a 2.0% pace and an even smaller 1.7% on a core basis. That’s well below the Federal Reserve’s target for inflation at 2.5% or less.

Some of that increase, what’s more, stems from gasoline prices and they are likely to recede soon because of the end of the summer driving season.

The upshot: the Fed doesn’t feel much pressure to change its low-interest-rate policy because of the threat of inflation. The bank is likely to change its policy for other reasons.

Later Tuesday morning, the Wells Fargo Housing home builders index is forecast to remain unchanged at 59 in September. Home sales appear to have slowed temporarily because of higher mortgage rates, but builders have filed more applications for construction permits in anticipation of stronger sales in the year ahead.

The Census Bureau, meanwhile, plans to release a slew of data on the U.S. economy, including an update on how much the typical American worker earns.